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Filed on April 14, 2009, published the first business day after.
- NCUA agenda includes Fair Credit items
- New Market Tax Credit gets innovation award
- CDFI awards include three credit unions
- Bernanke cites ‘tentative’ signs that decline is slowing
- Inside Washington
- CUs maintain strong presence in auto lending
- Huffington: Guess who's a bright spot in banking
- CEOs testify for inclusion in NY underserved areas
- Still accepting nominations for WYCUP
- CUNA Mutual annual report available online
- Single mom gets help restoring burnt home
- 14 Iowa CUs participate in Money Smart Week
- Capital CU sets up $500,000 endowment fund
- Former CEO seeks $3M after CUSO deal cancelled
- Mid-Atlantic CEO named to Primary Financial Co. board
- NBC affiliate discusses using CUs vs. banks
- CU System briefs
- Market News
- News of the Competition
- Job-hunting tactics for this recession
- PCLender.com paper addresses mortgage lending
- Teres Solutions opens conference to all CUs
NCUA agenda includes Fair Credit items
ALEXANDRIA, Va. (4/15/09)—The National Credit Union Administration (NCUA) released its seven-item open board meeting agenda for next week, which includes two Fair Credit Reporting Act (FCRA) actions.
The agency is expected to issue a final rule and guidelines regarding the accuracy and integrity of information furnished to consumer reporting agencies, the so-called "accuracy regulations." The final reg also will address consumers' direct disputes with furnishers of credit report information.
The proposal was first issued jointly by the NCUA and the Federal Trade Commission (FTC) in 2007, and other agencies were required to develop rules under provisions of the Fair and Accurate Credit Transactions (FACT) Act.
The NCUA will also vote whether to issue an Advance Notice of Proposed Rulemaking, seeking further comment on the definition of "integrity" under this provision of the FCRA, and what standards would make a credit report have integrity.
Also on the April 21 agenda, the NCUA will propose clarifications and staff interpretations to Part 706 of the Unfair and Deceptive Practices rules.
No major changes are anticipated; the NCUA will be renumbering some sections, providing clarification on deferred interest rate programs, and examples in the staff interpretation. The proposed rule will also clarify that the regulation does not preempt the federal Servicemembers Civil Relief Act. A 30-day comment period is likely.
Also on the agenda:
- Delegations of Authority, Office of Small Credit Union Initiatives;
- Creditor Claim Appeal;
- Budget, Office of Capital Markets and Planning and Central Liquidity Facility; and
- The monthly National Credit Union Share Insurance Fund report.
New Market Tax Credit gets innovation award
WASHINGTON (4/15/09)—The U.S. Treasury Department's New Market Tax Credit (NMTC) Program is one of the top 50 programs named in the Innovations in American Government Awards Competition by the Ash Institute for Democratic Governance and Innovation at John F. Kennedy School of Government at Harvard University.
Credit unions are among those eligible to participate in the NMTC program designed in 2002 to spur the investment of new private sector capital into low-income communities. The program permits individual or corporate taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments (QEIs).
Those investments must be made in designated Community Development Entities (CDEs). The Treasury's Community Development Financial Institutions (CDFI) Fund allocates the tax credits annually through a competitive application process.
Through the first six rounds of the NMTC Program, the CDFI Fund has made 364 awards totaling $19.5 billion in tax credit allocation authority. The CDFI Fund anticipates awarding another $5 billion of allocation authority to CDEs in the fall of 2009, including the additional $1.5 billion in allocation authority authorized through the Economic Recovery Act.
The Harvard school of government award, initiated in 1985, is intended to restore "public trust in government by promoting public sector creativity and excellence," according to the Kennedy School.
Competing programs must demonstrate innovative solutions, but may come from within a host of policy areas including health and social services; management and governance; community and economic development; education and training; criminal justice; transportation and infrastructure; and the environment.
Use the resource links below for more NMTC information.
CDFI awards include three credit unions
WASHINGTON (4/15/09)--Three credit unions have been awarded technical assistance grants from the Community Development Financial Institutions (CDFI) Fund.
Express CU, Seattle, Wash., received $99,963; and Union CU, Spokane, Wash., and Kunia FCU, Waipahu, Hawaii, each received $100,000. Twenty-seven organizations received money from the program. A total of $2.3 million will be distributed.
The CDFI Fund announced the 2009 Technical Assistance awards in advance of the 2009 Financial Assistance awards, and five months earlier than the award announcement in 2008.
"We recognize the economic challenges facing CDFIs, and the growing demand from low-income Americans for the financial services and products they provide," said Donna J. Gambrell, CDFI director. "In order to expedite the flow of critically needed resources into low-income communities, the CDFI Fund has implemented new operating procedures that have enabled us to expeditiously administer this vital program."
The CDFI Fund intends to make two additional award announcements related to the 2009 round of the CDFI Program--Financial Assistance Component. The first announcement will be made in June, when all $90 million of funding received through the American Recovery and Reinvestment Act of 2009 will be awarded. The second announcement will be made by September, when over $50 million of 2009 annual appropriations will be awarded.
Through the Technical Assistance Component of the CDFI Program, the CDFI Fund provides grants to start-up and existing CDFIs, helping them build their organizational capacity to serve their target markets.
For a full list of award winners, use the link.
Bernanke cites ‘tentative’ signs that decline is slowing
WASHINGTON (4/15/09)—In a speech that primarily addressed aspects of the country's current financial struggles, Federal Reserve Board Chairman Ben Bernanke also declared that he is "fundamentally optimistic" about the economy.
Bernanke, addressing students and faculty at Morehouse College, Atlanta, acknowledged that the current crisis has been "one of the most difficult financial and economic episodes in modern history."
However, in his conclusion he noted recent, "tentative" signs that the sharp drop in economic activity may be slowing.
He cited recent data on home sales, homebuilding, and consumer spending, as indicative of a leveling out of economic activity marking "the first step toward recovery."
"To be sure, we will not have a sustainable recovery without a stabilization of our financial system and credit markets. We are making progress on that front as well, and the Federal Reserve is committed to working to restore financial stability as a necessary step toward full economic recovery," he stated.
He added, "I am fundamentally optimistic about our economy."
Use the resource link below to access the Fed chairman's speech.
Inside Washington
- WASHINGTON (4/15/09)--Many homeowners are missing their mortgage payments because they are unemployed, according to a Boston Federal Reserve study (Reuters April 14). Job loss is more likely to cause borrowers to default than tough mortgage terms, the study indicated. Loan modifications may not help investors, either, according to Christopher Foote and Paul Willen, Boston Fed economists; Kristopher Gerardi, Atlanta Fed economist; and Lorenz Goette, University of Geneva professor ...
- WASHINGTON (4/15/09)--Suspicious activity reports (SARs) have increased, and the spike may mean an increase in financial crime, according to some financial industry experts. Reports filed by depository institutions in 2008 jumped 13% compared with reports a year earlier (American Banker April 14). Financial institutions are reporting fraud and attempted fraud, said Peter Djinis, former Financial Crimes Enforcement Network (FinCEN) official. A Federal Bureau of Investigation report found that 63,173 SARs involving mortgage fraud were filed in the fiscal year ending Sept. 30. About 28,873 more were filed from October 2008 to February also. As more banks make modifications and work out loans, the more they are checking for fraud. They also fear regulatory criticism, observers said. Last week, the Federal Trade Commission, Treasury, Justice Department, FinCEN and the Department of Housing and Urban Development created a program to stop loan modification fraud ...
- WASHINGTON (4/15/09)--The Federal Deposit Insurance Corp. (FDIC) has received about 400 comments from institutions and investors on its Legacy Loan program. Comments ranged from taxpayers' letters saying they do not support the program, to banking industry representatives who suggested ways to make the program effective. Lawyers at Orrick, Herrington and Sutcliffe LLP suggested broadening the program to include all types of loans, including credit and corporate. Dr. Linus Wilson, a professor at the University of Louisiana at Lafayette, said his research indicates that "it is much better to buy toxic assets from troubled banks after troubled banks have entered a regime similar to receivership than before those bad assets are written down." Under the current proposal, Wilson said he fears that only banks that sell the assets will be well-capitalized. "Only banks that are insolvent or are experiencing financial distress will see improved operating decisions and better lending incentives if they reduce the volatility of their assets. If this is the case, then U.S. taxpayers will bear the risk of huge losses without improving the incentives in troubled banks." ...
- WASHINGTON (4/15/09)--The Federal Deposit Insurance Corp. (FDIC's) temporary debt guarantee coverage program has experienced an increase in participation by more than one-third in March. About 97 issuers were participating at the end of last month, compared with 73 in February. Outstanding debt guaranteed by the FDIC also increased 25% to $336 billion (American Banker April 14). The biggest jump in participation was in the category of institutions with assets of less than $10 billion ...
CUs maintain strong presence in auto lending
ONTARIO, Calif. (4/15/09)--Credit unions continued to maintain a strong market presence in the auto lending arena in the first quarter of this year, with a 24.8% market share in February, according to CUDL.
CUDL is a point-of-sale and indirect auto lender for credit unions. It became the third largest lender of auto loans in January, behind Chase Auto Financing and Toyota Financial Services.
About 936 U.S. dealerships closed last year due to lack of financing. Lenders who relied on asset-backed securities to make auto loans have run out of funds because there are fewer financing sources, according to Joe James, CUDL market research analyst.
Credit unions continue to lend, even though some major lenders do not. Auto loans make up one-third of credit unions' portfolios, James said.
General Motors (GM) and Chrysler were the top cars financed in the first quarter of 2009 on the CUDL platform, at 19% and 18%, respectively. This is because of the Invest in America program, James said. Invest in America is a credit union auto loan discount program that offers incentives to credit union members who buy qualifying GM and Chrysler vehicles.
Credit unions have seen an increase in charge-offs and delinquencies, but it's much lower than that of banks, he added.
"Credit unions are still offering low [interest] rates to members," James said.
Loan terms also have shifted. Right now, 60-month loans are the most common for credit unions--a shift from 72 months last year. "Credit union members are seeking shorter terms," James said.
Huffington: Guess who's a bright spot in banking
MADISON, Wis. (4/15/09)--Credit unions are a "bright spot on the banking front," Arianna Huffington wrote on her blog Monday in The Huffington Post (April 13).
"They're lending, their balance sheets are solid, and their capital levels are near record highs," Huffington added.
She also wrote that credit unions are owned by shareholders, put member service ahead of profits and have avoided the subprime loan fiasco.
Huffington mentioned on her Facebook page and to her followers on Twitter that she was going to write about credit unions, and asked readers to send in their thoughts.
Some reader responses posted on her blog:
- "My own experience suggests that if you are looking for a secure financial institution in these turbulent times, think small and think local ... look for banking and credit institutions that have ties to your community," a reader wrote about his positive experience going to a credit union.
- "A credit union saved me from Bank of America. Every day BoA had a way to take some amount of money from me--every day a fee ranging from 25 cents to 35 dollars. Once I went credit union, transparency came back into my life. I woke up with the same amount of money I went to bed with ... The robbery was over. I will never trust a large bank again."
- "All I can say is that nothing beats the personal attention a credit union offers. It's the ‘Cheers' bar where everybody knows your name."
- "My 19-year-old daughter, with no previous credit history, was unable to get a car loan even when she was putting 50% down. Our credit union came through for her."
CEOs testify for inclusion in NY underserved areas
ALBANY, N.Y. (4/15/09)--Credit union CEOs from throughout New York State provided testimony on behalf of the Credit Union Association of New York and state credit unions at a series of regional hearings recently held by the state Banking Department.
The hearings are part of the department's review of the Banking Development District Program (BDDP), a program created in 1998 to encourage banks to set up branches in under-banked and underserved areas. Credit unions currently are not included among the financial institutions authorized to participate in the program.
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Linda Levy, CEO, Lower East Side People's FCU, New York, provides testimony at a public hearing in New York City on the Banking Development District Program.
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LESPFCU was founded in 1986 as a result of the closing of the last commercial bank within a 100-square-block area. The credit union opened with $350,000 in assets. Today it has two branches and has grown to $22 million in assets.
"We found a way to serve this underserved community against tremendous odds," Levy said. "We have over $14 million out in loans for affordable, income- and resale-restricted cooperative apartments, maintaining affordable housing across the five boroughs of New York City. Imagine how much larger we could have been, how many more affordable housing loans we could have made, had we been part of the BBDP."
In the Capital Region and Central New York area, the banking department requested written testimony be submitted. Susan Commanda, CEO, Hudson River Community CU, Corinth, and Ron Ehrenreich, CEO, Cooperative FCU, Syracuse, provided written testimony.
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In Buffalo, the New York State Banking Department listens to testimony on the Banking Development District Program from Al Frosolone, CEO, Niagara's Choice FCU, Niagara Falls. (Photos provided by the Credit Union Association of New York)
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"Membership in state and federal credit unions in New York is limited by law," Frosolone said. "It may be based upon a common employer, association, school, union, or community. This local-ownership component created another aspect to their mission--namely reinvesting in and the betterment of local communities they serve.
"Credit unions can also provide benefits to the state's municipalities," he continued. "By enabling credit unions to participate in the BDDP, municipalities have the option to invest in not-for-profit financial institutions that keep investments local. In turn, the municipal deposits would be used to provide much-needed lending capital to potential borrowers in the community."
Each representative countered bank arguments that credit unions' tax-exempt status should keep them out of the program. They testified how, like any other not-for-profit organization, credit unions do not pay income tax because they have no income to tax.
Credit unions do pay income tax, and members pay tax on any dividends they receive. They also pointed out that since 2002, about 131 underserved (low-income) areas have been added to the charters of 60 credit unions in the state. Each one of the 131 areas now has a credit union branch where members can get low-cost financial services.
Credit unions want to serve more underserved communities, which is why the Credit Union Association of New York supports current legislation sponsored by State Rep. Francine DelMonte (D-Niagara) and State Rep. Hakeem Jeffries (D-Metropolitan)--A.166 and A. 168, respectively. These measures would authorize credit unions to participate in the BDDP.
Still accepting nominations for WYCUP
MADISON, Wis. (4/15/09)--Alison Carr worked for Point West CU in Portland, Ore., when she was nominated for World Council of Credit Unions' (WOCCU) Young Credit Union People (WYCUP) Scholarship Program in 2006. Being named a winner at first was a surprise to Carr, but no more so than the benefits she realized from receiving one of WOCCU's top honors.
"I wasn't listening when my name was first called, but the resulting experience has dramatically changed my life," said Carr, who now serves as director of learning events for the Credit Union National Association's Center for Professional Development. "Winning the award was highly emotional for me, and the advantages I've gained in career development have been enormously beneficial."
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World Council of Credit Unions (WOCCU) Chairman Melvin Edwards (left) and President/CEO Pete Crear (third from left) congratulate 2008 WOCCU Young Credit Union People winners Joe Agro, Anna Corona, Rafal Sokolowski, Nicholas May and Rachel Milan at last year's World CU Conference in Hong Kong. (Photo provided by the World Council of Credit Unions) |
WYCUP is open to individuals who have already made significant contributions to the development of their own credit unions, regional or national credit union systems and have demonstrated the potential to employ their unique talents at the international level.
"The WYCUP honor has provided confirmation of my beliefs in the cooperative movement and increased my commitment to my job and to the credit union system," said 2008 winner Rachel Milan, director of marketing and community investment for Teachers CU, Hamilton, Ontario, Canada. "I have become more confident in my work, which fuels my desire to help our credit union grow during these difficult times."
Nominees also must be sponsored by their credit union or credit union organization to attend WOCCU's 2009 World Credit Union Conference in Barcelona in July.
WOCCU will award the WYCUP scholarship--an all-expense-paid trip to the 2010 World Credit Union Conference--to five recipients at the 2009 conference in Barcelona. All nominees, regardless of award status, will be formally recognized in Barcelona and invited to take part in events organized specifically for participants age 35 and younger, including a special networking session.
Conference registrants in this age group also qualify for a discounted registration fee regardless of whether they compete for the scholarship.
"If you're passionate about the contribution you make to the credit union movement, you'll find WYCUP a wonderful experience," Carr said. "You quickly realize we're all unified in the challenges we face. I really appreciate WOCCU's commitment to continue making this opportunity possible."
CUNA Mutual annual report available online
MADISON, Wis. (4/15/09)--CUNA Mutual Group's 2008 Annual Report is available online. The report contains information about CUNA Mutual's financial strength and how the company is navigating challenging economic times.
This is the second consecutive year the report is available exclusively online, saving money and environmental resources. Interactivity is part of the report design, as videos and audio clips allow readers to hear directly from company leaders and customers.
CUNA Mutual said it recorded strong revenue growth--6.8%--and overall operating results--a gain of about $151 million--in 2008.
For example:
- The company recorded revenue growth of nearly 7% last year and an operating revenue gain of more than $150 million;
- Investment losses offset operating earnings as the company recorded a net income loss in 2008;
- However, even with investment losses, the company policyholder surplus remains at more than $1.2 billion.
The company's total asset size was $13.2 billion in 2008.
CUNA Mutual's 2008 operating results remained strong during the current economic downturn, the company said. For example:
- Retention of credit union customers on CUNA Mutual's core products was 98.2%;
- Crop insurance--a new product--delivered $246 million of revenue;
- Underwriting was strong across products, including mortgage insurance; and
- Product diversification created product resilience.
CUNA Mutual is a provider of financial services to credit unions, their members and customers worldwide.
To access the 2008 Annual Report, use the resource link. Readers also can access a printable PDF online.
Single mom gets help restoring burnt home
SAN ANTONIO (4/15/09)--Security Service FCU helped a single mother qualify for a loan to restore her San Antonio house, which was nearly burned to the ground last June.
After the fire, the city was ready to bulldoze the ruins. Elizabeth Llanas would not have qualified for a traditional loan to restore her historic home, built around 1905, said the credit union.
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Elizabeth Llanas points to where the fire that nearly burned her home to the ground started and what's left of her son's room. Security Service FCU was part of a community effort to help her rebuild the historic home. (Photo provided by Security Service FCU) |
"Because Security Service FCU is a completely local institution with a membership and depositor base that is ‘puro San Antonio,' they saw the whole picture of the proposed transaction clearly," said Robert Jodon, NHS executive director. "Because Security Service's lending is local, loan products are designed to match local market conditions and characteristics.
"So instead of being frozen within the general malaise of the mortgage market place, Security Service was nimble and able to step to the fore when we needed them," he added.
At a groundbreaking ceremony held April 8, San Antonio Councilwoman Mary Alice Cisneros was joined by architect Jose Garcia de Lara, who provided pro bono services to Llanas.
Also present was Keith Sultemeier, Security Service chief financial officer. "We are honored to be able to participate in this project with NHS," Sultemeier said. "Liz is a truly remarkable woman, and this is a truly remarkable project. It's a perfect and encouraging example of a community coming together to support one another."
Security Service FCU, based in San Antonio, has more than $5 billion in assets.
14 Iowa CUs participate in Money Smart Week
DES MOINES, Iowa (4/15/09)--Credit unions are among the financial institutions, government agencies, not-for-profit organizations and community groups across Iowa who have banded together to present the second annual Money Smart Week.
Money Smart Week is a week of events developed to help central Iowans of all ages better manage their finances, said the Iowa Credit Union League.
The Federal Reserve Bank of Chicago and nearly 100 partners will offer more than 95 free financial seminars April 18-25 in Cedar Rapids/Iowa City, greater Des Moines and the Quad Cities. Topics range from financial literacy for youth to retirement planning and investment options for senior citizens.
Fourteen events will be sponsored by credit unions:
- Personal Finance Class--Budgeting and Saving, Community lst CU;
- CreditAbility: Build a Strong Credit History, Advantage CU;
- Build a Basic Budget: The Five-Step Spending Plan, Village CU;
- Educational Seminar--Build a Basic Budget, Midland CU;
- Starting a Small Business, Community Business Lenders;
- Get Your Savings Matched, Affinity CU and the Iowa Credit Union Foundation;
- Build A Basic Budget: The Five-Step Spending Plan, Metco CU;
- First Time Home Buying Made Easy, Linn Area CU;
- Credit Union Basics, Dupaco Community CU;
- Cookin' Up a Good Credit Score, Linn Area CU;
- Financial Fun and the Family Museum with the Family CU, The Family CU;
- Estableciendo Su Futuro Financiero...Establishing Your Financial Future, Ascentra CU;
- Retirement Solutions Seminar, Ascentra CU; and
- Planning for Retirement, IH Mississippi Valley CU.
Capital CU sets up $500,000 endowment fund
KIMBERLY, Wis. (4/15/09)--Capital CU has created the Capital CU Charitable Giving Fund that is being financed through a $500,000 endowment.
The $324.3 million asset, Kimberly, Wis.-based credit union received a $437,000 settlement as part of a class action lawsuit over a contaminated supply and used the money along with another $63,000 that it donated to establish the endowment (The Post-Crescent April 11).
The fund is designed as a perpetual endowment fund--which means each year about 5% of the fund will be available for eligible 501(c)3 nonprofit organizations applying for funds, Alan Zierler, Capital president/CEO, told the newspaper.
"With the state of the economy, more and more of our friends, neighbors and relatives are facing difficult times," Zierler told the paper. "The main objective of this fund is to provide for basic needs [food, shelter, clothing and medical care] making a positive impact on many lives."
Former CEO seeks $3M after CUSO deal cancelled
MILWAUKEE, Wis. (4/15/09)--The former president/CEO of Prime Financial CU, Cudahy, Wis., is seeking nearly $3 million from Guardian CU, West Allis, Wis., in a lawsuit alleging breach of contract stemming from the two credit unions' cancelled merger.
Rich Koenig left Prime Financial CU in December. His suit alleges he signed a 10-year contract with Guardian to become its president of consulting service development, where he would run its credit union service organization (The Business Journal of Milwaukee April 10).
The credit unions announced in October that they intended to merge (News Now Oct. 10). However, Koenig left Prime Financial in December to pursue other interests, the credit union announced in February. The proposed merger was cancelled in February (News Now Feb. 20).
In March, citing management issues, the Wisconsin Office of Credit Unions took control of Prime Financial and dismissed its board of directors (BizTimes.com March 3).
Koenig also resigned in December as chairman of Central States Mortgage Co., a mortgage company co-owned by 25 credit unions. Central States closed shop in March and filed for a conservatorship liquidation earlier this month.
Mid-Atlantic CEO named to Primary Financial Co. board
WESTERVILLE, Ohio (4/15/09)-- Primary Financial Co. LLC, a credit union service organization owned by 27 corporate credit unions, announced that Jay Murray, president/CEO of Mid-Atlantic Corporate FCU, is its newest board member.
Murray fills an open seat. His term will expire in 2011.
He has been with Mid-Atlantic since 1991, and has been president/CEO since July 2008. At Mid-Atlantic, he served previously as corporate account manager, vice president of member services, and senior vice president and chief operating officer.
Murray also sits on the boards of Impel Consulting Group, a credit union consulting company; My CU Services, Mid-Atlantic's electronic bill payment company; and Sollievo Group, Mid-Atlantic's benefits and insurance company.
Other directors include: Board Chairman, Lew Lambert, president, Minnesota operations, Members United FCU; Lee Butke, president/CEO of Corporate One FCU; Greg Moore, president/CEO, Georgia Central CU; and Kathy Garner, president, Northwest region, Southwest Corporate FCU.
Primary Financial Co. has offices in Westerville, Ohio, and Columbus, Ind. It serves more than 4,000 credit unions throughout the U.S. with more than $9 billion in credit union investments outstanding.
NBC affiliate discusses using CUs vs. banks
EVANSVILLE, Ind. (4/15/09)--A local NBC affiliate, 14 WFIE, asks the question, "Should you use a bank or a credit union?" and credit unions received several positive comments.
The article quotes Todd Mark with the Consumer Credit Counseling Service, who notes that it's a fundamental financial decision. He points out that banks are for profit and credit unions are owned by their members. "They're not looking to turn that profit for shareholders. It's going back to you as a member," he said.
The station also interviewed credit union members Chasity Crawley, who used her credit union to buy a car because it had a cheaper interest rates, and Birdie Reyes, who said she earns more on her savings accounts.
The recent average rate on a bank savings account was 0.36%, while it was 0.54% at credit unions, the station said. The differences add up, especially with big purchases, Mark said.
The only positive thing mentioned about banks was convenience in number of branches and ATMs, but the article also pointed out that credit unions are joining ATM networks.
For more, use the link.
CU System briefs
- RICHARDSON, Texas (4/15/09)--Texans CU announced Tuesday that interim chief executive Mike Sauer has been named president/CEO, effective immediately (The Dallas Morning News April 14). Sauer, a former manufacturing executive, has served on the Richardson, Texas-based credit union's board since 1992. He was chairman of the board between 2002 and 2006. Sauer succeeds David Addison, who stepped down in January after five years. During that time, Texans increased its business lending significantly before the economy hit its slump. As of Dec. 31, Texans' delinquent loans and repossessed real estate amounted to 8.4% of total assets, up from 5.6% as of Sept. 30 ...
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HIGHTSTOWN, N.J. (4/15/09)--New Jersey credit unions were represented at the ribbon cutting/open house for the district office of U.S. Rep. Leonard Lance (R-N.J.) in Flemington. Lance, a freshman, was named to the House Financial Services Committee, said the league (The Weekly Exchange April 13). Attendees included, from left, Lance; Affinity FCU's Beth Degnan; and New Jersey Credit Union League Director of Government Affairs Chris Abeel.(Photo provided by the New Jersey Credit Union League) ...
- COLORADO SPRINGS, Colo. (4/15/09)--After Ent FCU relocated its Schriever AFB service center to a larger, more centrally located facility in January, its Schriever location experienced a 229% increase in new accounts and an 80% hike in consumer lending. The credit union opened 47 new accounts in 30 days as a result of its grand opening military appreciation promotion. Katherine Nester, the credit union's Schriever center manager, noted the larger, more convenient center and new drive up ATM offer greater convenience for members on base ...
- FORT WAYNE, Ind. (4/15/09)--David L. Thieme, 49,former CEO at General CU, Fort Wayne, was charged with one count of fraud against a financial institution for authorizing loans to members that were not paid back, said records filed Monday in Allen Superior Court (The Journal Gazette and News-Sentinel April 14). Thieme, who worked for the credit union for 20 years, became CEO in 2004. He was terminated in April 2008 after three employees reported irregularities in his loan transactions. Authorities say that between May 2004 and April 2008, Thieme allegedly engaged in schemes to conceal loan delinquencies, including modifying loan obligation dates and delaying payment dates. He also allegedly overpaid a member for contracted janitorial services and used the excess payments to reduce the member's loan balance, the records indicated. The credit union lost about $1.6 million, less than 2% of the credit union's assets; however, no member suffered losses because Thieme allegedly misapplied credit union funds, not members' account funds. Within a week of his termination, Thieme paid $800,000 on the loans he oversaw. ...
- HARRISBURG, Pa. (4/15/09)--TruMark Financial CU's Springfield shared branch scored a perfect 100% during a recent mystery shop. The score is based on branch appearance, signage, teller appearance, and procedures. It was the fourth Pennsylvania shared branch to receive a 100%, said the Pennsylvania Credit Union Association. Mystery shops are conducted at every shared branching location at least once a year (Life is a Highway April 14) ...
- TAMPA, Fla. (4/15/09)--Cornelius Bryant, 30, of Tampa was sentenced to 22 years in federal prison on charges of bank robbery and violation of a supervised release, according to the U.S. Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives. The robbery occurred June 23, 2008, at MidFlorida FCU, Lakeland, Fla. At the time of the robbery, Bryant was serving a term of federal supervised release for a prior bank robbery conviction in 2002 (US Fed News April 11). He was convicted by a jury on Dec. 11. Sentencing was by U.S. District Judge Richard A. Lazzara ...
Market News
MADISON, Wis. (4/15/09)
- Wholesale prices plunged in March as energy prices retreated, the Labor Department reported Tuesday. The Producer Price Index (PPI) declined 1.2%, following a 0.1% advance in February and a 0.8% increase in January. The index for energy goods tumbled 5.5% last month following a 1.3% gain in February. Food prices fell by 0.7% after a 1.6% decline. Excluding food and energy, the core PPI was unchanged in March. Weak demand has brought an end to producer price inflation, noted Moody's Economy.com (April 14). With little prospect for better demand growth, any price pressures remaining in the pipeline won't pass through into inflation, giving Federal Reserve policymakers plenty of room to continue acting aggressively ...
- Retail sales tumbled 1.1% in March as consumers continued to tighten their belts, the Commerce Department reported Tuesday. Retail sales were down 9.4% from March 2008. Total sales in the first quarter were down 8.8% from a year earlier. Gasoline station sales plunged 34% from March 2008, and motor vehicle and parts dealers sales were down 23.5%. Sales declines were widespread at other retailers as well (The Wall Street Journal Online April 14). Sales fell 1.8% at clothing stores, 5.9% at electronic stories, 0.2% at general merchandise stores, and 1.4% at eating and drinking places. Sales rose in only two categories: health and personal care stores (up 0.4%); and food and beverage stores (up 0.5%). "Consumer spending matched the economic reality in March," noted Sung Won Sohn, an economics professor at California State University. "The mounting job losses and the continuing credit crunch played havoc with retail sales," added Sohn ...
- Increased economic uncertainty and rising costs have made workers less confident about their retirement, according to a new survey by the Employee Benefit Research Institute. Just 13% of respondents said they were very confident they'll have enough money to retire comfortably. "Concerns about the poor economy coupled with the losses that have recently been experienced in the stock market have resulted in the lowest percentage (of a confident outlook) since the start of the survey 19 years ago," noted EBRI Research Director Jack VanDerhei. About half of respondents said their household savings and investments (excluding the value of their home) total less than $25,000. On an optimistic note, 81% of those who said they've lost confidence in having enough money to retire said they are spending less (Associated Press via Yahoo! News April 14) ...
- More chief executives received pay raises than had their pay lowered in 2008, even as millions of dollars in taxpayer money went to aid struggling companies, according to an AFL-CIO survey. Citigroup, which received $45 billion in bailout money last year, paid CEO Vikram Pandit $38 million in compensation. Median CEO salary increased 7% last year. Of 946 companies polled, 480 executives received pay raises, while 463 saw pay cuts. Of chief executives whose compensation rose, the average was $5.4 million. "When it comes to CEO pay, many companies continue to hew to the fiction of pay for performance," said Daniel Pedrotty, director of the labor group's Office of Investment (Reuters via The New York Times April 14) ...
- Small-business confidence remained near a 35-year low in March, according to a survey by the National Federation of Independent Business (NFIB). The trade group's index of small-business optimism dropped 1.6 points to 81, the second-lowest reading in the 35-year history of the survey. Firms continue to cut employment. About 12% of respondents said they planned to cut jobs over the next three months, up two points from February. "It appears that owners are not through with their labor-based cost cutting," said NFIB Chief Economist William Dunkelberg. "Cost cutting is likely being overdone. What this portends, however, is a rapid improvement in employment and earning when the economy establishes forward momentum," said Dunkelberg (Reuters via Yahoo! News April 14) ...
News of the Competition
MADISON, Wis. (4/15/09)
- Goldman Sachs has raised $5 billion in a share sale to help repay $10 billion in government bailout money. The bank announced the share sale as it reported better-than-expected profit of $1.81 billion for the first quarter, reflecting a surge in trading revenue that outpaced asset writedowns. Other banks may follow suit if Goldman returns the government bailout money, said Sanford C. Bernstein analyst Brad Hintz. "The right thing for government officials to do will be to delay the [Goldman Sachs] repayment until a significant group of banks are able to repay simultaneously under some organized plan," added Hintz (Bloomberg.com April 14) ...
- In a bid to rebuild its capital base, the Federal Home Loan Bank of San Francisco said it won't pay a dividend for the first quarter. The bank also said it won't repurchase excess stock held by members on April 30. The bank said the actions reflect concerns that it could face added other-than-temporary impairment (OTTI) charges on its private-label mortgage portfolio. In a letter to members, President/CEO Dean Schultz said more OTTI charges could be coming. "Ongoing stresses in the credit markets, substantial declines in real estate values, and weakness in the U.S. economy are continuing to affect the loan collateral underlying the bank's nonagency mortgages," said Shultz. "As a result, it is likely that the bank will incur credit losses on some of these securities at some future time and will record impairment charges" (American Banker April 14) ...
- New York Attorney General Andrew Cuomo and the Securities and Exchange Commission (SEC) are investigating whether private-equity firms and hedge funds made improper payments to receive investments from the state's pension fund, said a personal familiar with the probe on Tuesday. David Loglisci, New York's former deputy comptroller and chief investment officer, and Henry Morris, a top political adviser and chief fundraiser for former New York Comptroller Alan Hevesi, were charged last month in a 123-count criminal indictment. The SEC also has brought a civil case against the two men, alleging that millions of dollars in phony placement fees were paid to Morris from 2003 to 2006. Cuomo has alleged that they sold access to money held by the state pension fund to favored investment firms, in exchange for kickbacks (Dow Jones Newswires April 14) ...
- A brokerage unit of Fifth Third Bancorp will pay $2 million to settle regulatory charges that it made unsuitable sales and exchanges of variable annuities. The Financial Industry Regulatory Authority (FINRA) said Fifth Third Securities will pay a $1.75 million fine and make $260,000 of restitution available to customers. Fifth Third customers, "including those who were elderly and needed access to their money, were subjected to needless expenses and long surrender periods," said FINRA enforcement head Susan Merrill (Reuters via msn.com April 14) ...
Job-hunting tactics for this recession
WASHINGTON (4/15/09)--The federal government recently announced that the national unemployment rate was the highest in 25 years (U.S. Department of Labor April 3). The 8.5% rate for March means that two million workers have lost their jobs since New Year's Day.
Worse, these losses come after the disappearance of three million jobs last year.
Although the numbers suggest that it's not exactly a good time to be looking for work, job seekers have an advantage not widely available to previous generations of job seekers. Here, courtesy of the Credit Union National Association's Center for Personal Finance, are some job-hunting tactics that take advantage of the best job search tool ever:
- Go ahead--advertise yourself online. Sites that allow job-seekers to post searchable resumes are all the rage. They give your "hire me" appeal enormous reach. But the increasing popularity of this approach forces people to go to extremes to stand out--have you shot your "hire me" video yet? By all means, post your resume on as many serious sites as you can. However, that's only a small part of the Internet's value to the unemployed.
- Reach out online. Many job openings are not advertised. Using personal and professional contacts has always been important for job seekers. Now the Web makes it easy to reach out to any and everyone you know--and through them, their contacts as well--through online social networks. Announce that you're looking for work and ask them to tell you about any openings that might be a match for your background and skills. Each online group you join will increase the potential flow of job alerts.
- Research online. Stay up to date by following your industry's news online daily. Explore the websites of companies you're interested in for information to strengthen your applications. Anything that tells you about prospective employers' product and service lines, competition, and announced plans can help you customize your resume and tailor your cover letter to individual job openings. And when you do get an interview, your research will allow you to talk about your potential value in specific and concrete terms.
Remember, prospective employers are not looking to help you out. They're looking to help their companies. Your best sales pitch will connect the dots between your skills and experience and a company's goals, making your hire seem like a good investment. Use the Internet to locate job openings, sharpen your applications, and dazzle interviewers with your command of an employer's current needs and your ability to fulfill them.
For more information, read "Unique Job Benefits Help Employees, Employers" in Home & Family Finance Resource Center.
PCLender.com paper addresses mortgage lending
HONOLULU (4/15/09)--Risky business models that led to the failure of many national commercial banks and non-depository mortgage bankers have opened up an opportunity for credit unions to gain mortgage lending market share, according to a white paper from PCLender.com.
The paper is "The Future of Mortgage Lending: Why the time is right for credit unions to increase market share and how they can effectively compete in the new marketplace." It recommends that credit unions grow their share by exploiting their core advantages. The advantages include strong relationships with members, healthy balance sheets and an abundance of expertise, according to paper author Lionel Urban, PCLender.com president.
The paper also addresses case studies from Patrion Mortgage and Hawaii State FCU, Honolulu. Both have grown their market share in mortgage lending through Web-based tools.
Teres Solutions opens conference to all CUs
AUSTIN, Texas (4/15/09)--Teres Solutions is opening up its annual user conference to all credit unions.
The conference, "Shine in '09" will be offered May 31 to June 3 in Grapevine, Texas. The conference will have two tracks: one for Teres Solutions Software Application for Integrated Lending and another open to anyone in the credit union industry.
Teres develops direct and indirect lending software products for financial institutions, including credit unions.
Educational tracks and industry panels will cover how credit unions can expand this year, lending best practices, compliance imperatives, auto industry trends, merchant lending, automating cross-selling and up-selling. Many sessions will feature demonstrations of new technologies, Teres said.
"With the credit union share of the auto lending market jumping to 25% this year, now more than ever, credit unions need a forum where they can share ideas on how to best take advantage of this once-in-a-lifetime member and lending market grab," said Tim Kelly, Teres CEO.
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